Real Investor Radio Podcast

Jack BeVier (00:01)
Hey everybody, this is Jack BeVier with another episode of Real Investor Radio. I am extremely excited today because we are catching up with a good friend of mine, Dan Butler with 98 Ventures. Dan, we've had on the show before, the podcast before, and really, really enjoyed the conversation. I'm very fortunate to be able to see Dan three times a year through the Real Investor Roundtable Mastermind that we put on.

Dan's somebody who I'm I'm always particularly interested in grabbing a seat next to at dinner because he's got such an incr really interesting breadth of entrepreneurial experience. And he's done everything at scale. and I don't think I've met a more consummate entrepreneur than than Dan. So sir, it is a pleasure to see you and a pleasure to have you back on Real Investor Radio.

dan butler (00:47)
Yeah, thank you for having me. It's great always good to connect. And like you said, like you said, having sitting by you at dinner is always a fun, fun time three times a year to pick your brains and try to come up with some new solutions out there for this ever changing market and all the all the craziness now out there that's going on. So thanks for having me.

Jack BeVier (01:06)
Yeah, man, absolutely. So just to refresh the listeners' memories, can you just describe all the different kind of businesses that you have going on, what you've done in the past? Just you know, give a two-minute bio

dan butler (01:16)
Mm-hmm.

Jack BeVier (01:16)
on your business career.

dan butler (01:18)
Yeah, like started out engineering, manufacturing operations, did a dual career for about thirteen years manufacturing and then building a real estate portfolio. And that parlayed into multiple business around brokerage, property management, maintenance company, things like that. kind of evolved about six years ago, sold a bunch of that, sold some houses to hedge fund, which created liquidity event and redefined myself really, you know.

think I would tell people I do three things commercial real estate. I still have my houses, but commercial is kind of where I've focused on to for the whole, you know, tax depreciation, cash flow play. and then lending business, you know, we're we we become more of a regional player, not just Memphis, Tennessee, but probably five markets now, which has been been great for us. and I love that part because it's it gets into my coaching and helping people create wealth.

so I spend a lot of time in that. And then thirdly is just investing in other entrepreneurs like you and I were talking about earlier, just f buying into businesses where capital can help them accelerate their business or pay down debt, something to make them healthier. not a chips off the table kind of situation, but something to help add a clinic, add a store, add a you know, new revenue stream, whatever that might be. that's kind of where I focused on. So it's been fun to

Not just have the real estate, you know, but using real estate to parlay that to diversify. and, you know, so anyway, that's that's probably the three that I would three legged stool that I'd give you.

Jack BeVier (02:45)
Dan is always incredibly, incredibly modest. Dan, how many properties did you did you build that rental portfolio up to and how many of those did you settle that hedge fund? How many do you still have under under your ownership?

dan butler (02:57)
You know, it I stopped keeping up with it like I used to. You know, you you kind of get older and wiser and just kind of like, what's you know, but I mean we were we were well over a thousand units, houses and doors. And then I sold a hundred and seventy to Vinebrook, which is kind of fascinating because within a year they were selling because Vinebrook just took a tank. That could that could be a whole nother episode of itself, just the rise and fall of private equity and you know.

And not all, but you know what I mean, like a lot of but we're probably sitting at, you know, nine hundred plus on the doors because of the and I I count commercial doors and suites, kinda like you do a door for, you know, for property or houses. And so that's that's the easiest form of measure versus number of parcels we're building.

So

Jack BeVier (03:41)
Gotcha. So what are you doing on the commercial side these days?

dan butler (03:44)
so I kind of use the theory of anti-Amazon, meaning little strip centers that have a tobacco place or a wig place or a haircutting place or you know, I'm trying to think HR block insurance agents, those kind of things are in strip centers. Also I'd call it blue-collar office space, where it's more like those little suites that people need, an address for the state to to have, you know, like a an a term

pest control or insurance agent again, something like that. And then industrial flex. So those are kind of my three things that we pursue. trying to keep in that fifteen hundred to three thousand square foot spaces. you kind of find the demographics there. You know, you can find a ton of people that can afford that. I bought a well my first shopping center I bought had a 15,000 square foot space

It was read bargain hunt, I realized realized quickly that that there's not many people that can afford to pay the the rent on a fifteen thousand square foot space. So anyway, just learn those lessons and really honing in on what we go after.

Jack BeVier (04:47)
And what is that? is that something that you've been doing more of? Or like is it is that an increasing area or you're that you're investing in, or is that something that you're winding down? And either way, I'm really curious like how you handle the property management side of that. Cause like, you know, trading in those not you know, trading in non credit commercial tenants from non credit resi tenants, you know, I'll put it that way.

dan butler (05:09)
Mm-hmm.

Jack BeVier (05:11)
It's still a pretty operational business, right? So like neither of those are really passive. Or have you f or or what's your take on that idea?

dan butler (05:18)
S yeah,

I would say it's not dollar general mailbox money. The Triple Net, you know, I have a few of those. I've got a few of those. it ends up being more of a gross modified lease situation where they cover, you know, the quarterly HVAC. They have to pay up to two thousand, three thousand dollars, depending on the tenant of HVA expense, and then you kick in. those are the big that that's the big items, right? I mean

and then mostly it's the roof, but anything inside they they're pretty much responsible for. We kind of tailor that lease. one of the key learnings that I I would share with the audience that I had to like get over myself is I owned a property management company, but we were really good at residential, but not good at commercial. And but my the agent that I was using to buy commercial was good at leasing, but you know, they charge six percent of the life of the lease. Well

That could be a thirty thousand dollar check just like that. And

Jack BeVier (06:13)
Mm-hmm.

dan butler (06:14)
I remember having the conversation with them, like I was trying to get my head around doing that move that switch because I just knew the residential leasing manager leasing age is not good at a commercial lease, although it only costs me a thousand bucks or you know what mean, like for

Jack BeVier (06:28)
Yeah.

dan butler (06:28)
a for a three thousand a month lease for five years kind of thing. and you know, I asked him what happens if a lease ends in a year, they move out. He goes, Man, that's just part of the game.

In the commercial world, you gotta get over it. And so I sucked it up and I and I tried it and I moved so my my company itself, we man like once it's leased, man, managing it's like cake work. You know what I mean? Like it's a real easy for the most part, you know. but I I outsource the leasing to a commercial agency agent that does the my buy and sell and it keeps them hungry as well, like feeding me deals, you know, I get a ton of off-market.

commercial deals. And I try to land, you know, I think you're kinda asking the why. I mean, I'm trying to land in that nine and a half ten cap range, which to me is just as stronger, stronger than a house. So

Jack BeVier (07:15)
Mm-hmm.

dan butler (07:16)
at le at least these days. So that's kind of kind of where we land.

Jack BeVier (07:20)
Yeah, that's really interesting. So between like commercial real estate, the lending that you've been growing a lot recently, I know we've talked about that. And then

dan butler (07:25)
Mm-hmm. Yep.

Jack BeVier (07:26)
those I'll put it like small business investments. what is, you know, the for those three pillars, like which of those do you feel like is ascendant, descending? you know, what what how do you think about the those three pillars in terms of their relative value, relative strength, where you are allocating resources between those three? Because you're in this

really like interesting position as an entrepreneur that you can it's not just, hey, I've got this one business and like I'm trying to make work it as best I can to get as much much out of this one thing as I can. You're you've got more of like a more of like an asset allocation perspective on on investing, but

dan butler (07:59)
Mm-hmm. Yep.

Jack BeVier (08:02)
all the things that you're interesting interested in are all, you know, entrepreneurial things, you know, like you're you're not looking to build a dollar dollar general portfolio. You're doing some

Some roll your sleeves up higher you know, to try to get some higher return perspective investments.

dan butler (08:18)
Yep.

Yeah, that's a great question. I think from a resource standpoint, I would tell you it we're putting a ton of resource in the lending business. when you go outside of your own market, as you can totally attest to, 'cause y'all are in what, forty eight states or forty six or something crazy, you know. I'm thinking I'm in five now. And once you go outside of your own market, it gets a lot more riskier.

lot more tools, a lot more resources to make sure you're, you know, your underwriting and all that stuff's good. So I feel like that's where the bulk of our time, money, and and technology is being spent, using a lot of Claude to help with the the the digging through the underwriting. but I would say, you know, but but it's also the hardest like in the lending business, it's hard to go get capital that's not like super expensive.

To grow the market, grow outside your market when you're a single operator like myself. Like I'm not a you know, private equity fund that I'm pulling in money. I'm having to go get to a local bank. Like I literally just had an email 20 minutes ago where I'm trying to get into Cleveland, Ohio, started loaning loans up there, and I emailed a bank and they're like, Well, tell me about this. What about this? Like, you're out of state, you know, like there's gotta, you know, it's a harder push to get into that market using local banks. but

Anyway, we're doing it. It's just a it's a slow trudge and raising some capital, private capital. But to to answer your bigger question of the how do you allocate, you know, basically we're you we're using the the the lending business as the engine of creating capital, right? Cash flow. And then and the rentals we have, we're we're now looking at saying, All right, this year we should make X. So now we need to go buy this much of commercial property.

To offset X at the minimum. You know, I want to be opportunistic. I want to turn down a deal, but I need at least a minimum of Y properties. Does that make sense? So

Jack BeVier (10:11)
It does, yeah, yeah, yeah.

dan butler (10:12)
I'm I'm using it more of is at my age and stage, you know, we we've gotten a lot older since we sort of started knowing each other ten plus years ago. But like, you know, I gotta start thinking a little differently and and and tax sheltering is is part of that strategy just to try to

you know, kick that can down the you know kick it down to to from the estate stand standpoint. But and then on the on the investing in businesses, I would tell you, I've kind of had my own personal philosophy of like, because I started out differently

not investing anything that does not create an immediate return. So like

Jack BeVier (10:47)
Okay.

dan butler (10:48)
some of the business I first invested in, it's like I had no literature, like no the operating agreement wasn't spelled out. We didn't have it a very defined of when I would get my money back. Now we're doing kind of a note slash equity position. So we get money day one. So it's got to be that structure before I invest in something.

You know, same thing on commercial. Like I was with my friends playing golf this week past weekend, and his dad is a developer for hotels. And my buddy invests with his dad. I'm like, well, what's that look like? And he's like, Well, you invest say just say $100,000 to build this hotel and you own a limited partnership, you know, ownership of it. Well, they don't see any money for at least three years. And I was like, I'm not doing that. So

Jack BeVier (11:30)
What so what tell tell tell me more. That feels

like that feels like a scar. Like I wanna pick at it. What what what led you to to like to to that being like a you know, a ph a philosophy that you are applying across the different businesses?

dan butler (11:44)
Well, if you think so the biggest scar was buying rental houses. Like when you put the debt on there, when we were first when you were younger kids, buying real estate and you put all this debt on there and the cash flow is almost, you know, almost to zero 'cause you got the debt service, the banks would look at you like, We have no cash flow. I can't give you any more money because you're you're you know so I I that was always a scar for me as far as like just

In turn like getting ri return, it's evident. and then the s second business that I invested in, which was a group of, you know, st retail stores in the Memphis area. I mean, I I'm I'm four years in and still don't have a return, like a monthly distribution. You know what I mean? Like I don't think I've lost my capital, but the it was a franchise model, the franchise changed, private equity bought them and did away with the royalty revenue kickback stuff. I it's a whole nother story, but like

It just made realize like, and I invested with those guys again to actually do some other retail, but I had a note in place, I get paid every month, and actually they turn that one to make a better profit. So I'm actually kind of losing as far as like I'm not getting 15% of the net, but I'm getting my 10% return on my note. But in three years, I'll get 15% of the net. Does that make sense?

Jack BeVier (13:04)
Yeah, yeah, I fall. I fall.

dan butler (13:05)
So,

David Moses (13:05)
Yeah.

dan butler (13:05)
anyway, I I just learned like you know.

Cash is king, you got you gotta have that, you know, because that's what banks are looking for. They they you know, they talk about that whole global cash flow.

Jack BeVier (13:17)
Uh-huh.

dan butler (13:17)
You know, you can you can go do great things if your global is really good and and you know the if if the lending business is carrying a lot of cash flow, it can help you go buy a lot of commercial buildings. Does that make sense? So

Jack BeVier (13:30)
Yeah, yeah, it does, absolutely.

I mean that feels like something that by the way, we got we got our man David Moses here, joined us. How good to see you, buddy, how's it going?

David Moses (13:39)
Sorry, I'm a little delayed. My I had a parent teacher conference for my daughter and it was a little delayed. So I apologize.

Jack BeVier (13:45)
That's important.

dan butler (13:45)
Hope that

went well.

David Moses (13:46)
It went it went very well. She's she's got a hundred and four in the class. She's like, I think that's the highest grade we've ever had. And I'm like, Okay. I don't need to be here. I I have to go.

dan butler (13:52)
All right. Yeah, that's right. Why are we here?

Jack BeVier (13:56)
Nice.

dan butler (13:57)
That's funny.

Jack BeVier (13:59)
so the yeah, you mentioned I mean the conversation about like global debt service, right? Is like one that I don't know, kind of near and dear to my heart. Like the from two thousand seven to twenty nineteen, yeah that that was an a requirement of in order to grow a rental portfolio in in that example, or in order to get you know, and and in generally speaking, in order to get bank financing.

that math has to math, right? You have to have they they look at all your entire world, however many businesses you own, they will

dan butler (14:31)
Yeah.

Jack BeVier (14:32)
they'll spend a whole month putting them all into one big Excel spreadsheet and calculating what the global debt service coverage is and then reconcile it against your tax returns and have you explain every little difference so that they can get

dan butler (14:42)
Yep.

Jack BeVier (14:42)
their head around the idea that you're cash flow positive as a counterparty. And man, the DSCR loan just kind of like

stepped on that idea and just tossed it into the drain. And

dan butler (14:53)
Ha ha.

Jack BeVier (14:53)
I think that we're gonna be dealing with a bunch of dis you know, dislocations in the market as a result of that lack of discipline, which the banks have just, you know, ceded market share to the private lending space, and don't seem at least I haven't seen a whole lot of like adaptation or change of philosophy from the from the credit departments of the banks. But you're

dan butler (15:14)
I I can't

David Moses (15:15)
Yeah, they don't seem

dan butler (15:15)
tell how many banks I've asked Why don't

David Moses (15:15)
super excited to

dan butler (15:16)
you all do D S C R and they just they don't have an ish they don't have an interest. You know? It's just kinda like, mm. So but

Jack BeVier (15:20)
Yeah. Yeah. But you're using

that I mean you you're fo you're focused on that. I mean you I get the sense that you're like always cog cognizant of that because and and I would gather that it's largely as a result of your experience growing that rent that residential rental portfolio and then going through these commercial underwrites. You're are your lenders mostly banks?

dan butler (15:42)
Yes. I I would say mostly local banks. Yes. Yep. I went a different route

Jack BeVier (15:46)
Mostly local banks, yeah.

dan butler (15:49)
years ago, you know, for listeners to hear. Like I I talked to like the Bank of of America, Wells Fargo, and I just realized I was quickly a number. And you know, they were sending it off to like Birmingham, Alabama for underwriting. I'm like, what are you talking about? Sending it to Birmingham to like judge me judge me of my credit worthiness. You know what I'm saying? Like, you don't even know me. And

It was just a label moment for me and I pivoted and I started just going to local banks and real and I learned who was on the board and who you know what I mean? Like like if a board is full of farmers, that's where you need to go take your farmland. You don't take a rental portfolio, they're not gonna get that, you know. If a board's full of builders, you're probably gonna get you that's where you take your new builds, you know. So you just learn what they like and it's usually built up by the the board that's building into that bank. Does that make sense?

Jack BeVier (16:37)
It does, yeah. Yeah, absolutely.

dan butler (16:38)
It's an insightful

David Moses (16:38)
Yeah.

dan butler (16:39)
thing that I've thought of share because I don't think people really think that far into it. 'Cause it would just try to push something. I mean, I'll I'm very upfront with the banks, like, hey man, if this is not a s if this we're talking about a square peg and a round hole and we're trying to push a rope up a hill, let's I'll come back to you when I have what you need, you know, but

Jack BeVier (16:55)
Mm-hmm.

dan butler (16:56)
let's don't I don't want to waste your time and and they're they're super respectful of that. I think that works really well. So

David Moses (17:02)
How many how many different banks do you maintain a relationship with?

dan butler (17:06)
Woo.

I think we're at fourteen right now.

Jack BeVier (17:09)
And and you mentioned using banks to grow the lending business. So how are you thinking about that? So how are you planning like what's that structure look like? How are you planning out you know, I guess the liability side of your balance sheet from a growth, you know, from a growth perspective? How are you once you once you've allocated all the equity that you can and you got a bunch of pool loans, how are you growing it from there?

dan butler (17:28)
So because we have 14 banks, you know, and some have different appetites, I have a I have a philosophy to crawl before you walk before you run. So I might start with a million dollar line of credit on a bank and prove out the P and O and the balance sheet. And I've learned, you know, and this is like secret sauce, I would think, is like we used to go and like just flood a bank with new loans. You know how like you can just feed a bank as qu quickly back to back.

Well, next thing you the back office is complaining because you're like this bus this this loan business is too hard. So we changed our philosophy. And when we have a new relationship, that 14th bank, we'll take a million dollars in notes and bring them all at once, one time. All the collateral assignments, the deed of trust, the promissory note, the guarantees, the HUD, you know what I mean? Like all in one PDF. And they key it in and they don't hear from us for

you know, weeks and then we just start interchanging, you know, how the the and like one pays off, yeah, we get another one. Another one pays off, get another one. So like we never become a squeaky wheel. Does that make sense what I'm saying? Like it it I just learned and it I've done the last three banks and man it has gone so much better than the first eleven banks doing the that process. So but we just but to your answer your question I'm always thinking ahead

David Moses (18:44)
But y you had to have a portfolio to bring

dan butler (18:46)
what's that?

David Moses (18:47)
You had to have a portfolio to bring you know, it's not like you could have gone to bank one and said, Hey

dan butler (18:49)
True. That's true. That's a good point.

But yeah, yeah, we have to build up a bank. Then you have have the the warehouse lines to, you know, be able to have it with cash un unencumbered to go take it to to a you know bank to get it refinanced back out. So

Jack BeVier (19:07)
Hey, have you been flipping it all in this mix?

dan butler (19:09)
Never flipped.

Jack BeVier (19:10)
No, you just always been always been buying hold. If you were buying a piece of real estate, it was because it was a long term investment. So how

dan butler (19:16)
Yep. I never

Jack BeVier (19:18)
you and and so the rental business versus the commercial because I would you know there's some disruption on the commercial real estate side, particularly in the product segment that you're talking about, those strip centers, like, you know, if you can find the deals, their cap rates are probably pretty attractive right now. But why are you so what's your perspective on like how much risk you want to take? Like

Do you would you do you like being the equity on houses? Do you like being the equity right now? Do you prefer being the debt? Or is there a particular niche in either of those that you think is the sweet spot? Like how are you thinking about the sweet spot for

you?

dan butler (19:51)
Well, I think on the commercial side, I've just I've realized like you gotta have volume just like houses. I don't know what that sweet spot of volume is, but I know it's not one building. You know you know what I mean? Like like as far as like one goes vacant and that's where I learned on that one building, like having big vacancies, big suites is not the answer for me.

It's just too much. It takes down the cash flow. It could take the whole cash flow for the year by that thing being vacant for six months. It that destroys the whole building. As far

Jack BeVier (20:22)
Uh-huh.

dan butler (20:22)
as cash flow. on the lending side, I've kind of realized I I'm a big fan of the Burkey model. You know, and partnering up with a Burkey operator, and then I'm funding the guy in California that's working with the Burkey operator.

Jack BeVier (20:37)
okay.

dan butler (20:38)
That's been my I I love that model.

Jack BeVier (20:41)
What so walk walk give us the details, walk us through what a typical transaction looks like.

dan butler (20:45)
So kind of you know, a guy in Bempus, Tennessee, that guy, gal that that all their what's that? Best market, yeah. I mean I'm

Jack BeVier (20:52)
perfect market for it. Yeah. You're like the best market for it.

dan butler (20:57)
living in the backyard of the best market. they go find a house that's you know, they've reverse engineered this by the way. So they they try to get the sale to my borrower at 75% loan to value.

Jack BeVier (21:08)
Okay.

dan butler (21:09)
So they gotta get you know 50 cents loan to value.

20 something percent on the rehab and then four or five thousand as a fee, assignment fee, or you know, whatever you want to call it. And it could be, I don't really focus on that part as long as we're underneath 75%.

Jack BeVier (21:26)
Uh-huh.

dan butler (21:26)
And so we will and so then we they find the house and they're actually what I what I learned was they're actually they're they're doing two different sets of marketing. They're marketing to find the house and they're marketing find the buyers. You follow me?

Jack BeVier (21:40)
Mm-hmm.

Yeah.

dan butler (21:41)
So I'm just the the connecting point of getting them to be able to to make that transaction happen. Cause they don't have the money part. They got the house and they got the buyer. They don't have the money. And so I partner with those guys to then my relationships with both, but you know, I'm willing to do a hundred percent financing of that seventy-five percent loan. and so everybody's happy. The the

Operator's getting a deal done, he's getting making his fee. The borrower's getting in for just points and closing cost. And I've got a decent borrower that's not, you know what I learned through the last downturn, what I would call 2013, that third or fourth quarter when the interest rates went to eight percent. I just learned that those in real estate only is a tough that's a tough cookie to to to to work with. My borrowers are gonna be like attorneys, doctors,

IT professionals. So they're this is a wealth pie this is like them investing in stock. Instead of the stock they're gonna go invest in the house in Memphis, Tennessee and and play that game. So I'm just the conduit to do that.

David Moses (22:46)
What are what

what are what are the terms of that loan look like to the borrower?

dan butler (22:51)
twelve to thirteen percent five points.

An adopt fee.

David Moses (22:55)
And it and it's what for a year, two years?

dan butler (22:58)
Six months.

David Moses (22:59)
Six months.

Jack BeVier (23:00)
Average loan size.

dan butler (23:02)
One forty, hundred and forty thousand? Yeah.

Jack BeVier (23:04)
Okay. And you when you say and and you're

you feel like the you feel like the borrower side of the r risk is mitigated because you got, you know, a high net worth person with a real credit score who's

dan butler (23:15)
Yeah.

Jack BeVier (23:15)
here is a passive investment and you're facilitating that. But and then operationally you know the operator is actually not on the loan in your scenario, but they're but you know who they are, you have a relationship with them, they're feeding you a source of pipeline, so you are

dan butler (23:30)
Yep. Yep.

Jack BeVier (23:32)
You know, you've seen them operate, you know, you've seen them execute a hundred times and you got both sides of the committing.

David Moses (23:35)
D you don't you don't bind

dan butler (23:36)
That's right.

David Moses (23:37)
that you don't bind that operator at all?

dan butler (23:39)
I don't want

David Moses (23:39)
Like they're

not on the hook at all. Like they don't have e even a buyback, even a

dan butler (23:44)
No. now they if there we've had a few sticky situations where the borrower is just crazy or not happy or whatever and we work it out with the operator to go find another b buyer. And I might

David Moses (23:57)
Gotcha, okay.

dan butler (23:57)
I might transfer that loan to another borrower at like call zero cost, interest only. I just want to move it to somebody that's actually gonna perform and take me out in six months. So I I don't you know

That's one of the things I I look at long term partnership versus short term transaction. You know, y'all have heard me talk about that core value for years. Like I'm not worried about that those points in that dollar in that situation. I'm just trying to move the ball forward to the right borrower to help my operator and myself just get out of that that situation.

David Moses (24:27)
Sure, it's a it's a marathon, not a sprint.

dan butler (24:29)
Correct. That's right. And it makes

Jack BeVier (24:31)
And so you

dan butler (24:32)
like that that borrower, the original one's gonna be happy now and probably refer us business 'cause he was able to you know what I mean? Like it just kept it out. I mean I I try to stay out of the legal zone. I try to say stay out of like, you know, I don't know, the adverse relationships. That's just not I mean, I try to take the high road. I the high road's the best way to go on this kind of stuff. Like, just not worth it.

Jack BeVier (24:54)
And so you are you using that approach to go to other cities also? You find the turnkey operator there and are set setting that setting that up as a machine. Nice. That's awesome.

dan butler (25:04)
Yep. Yep. It's and

it's it's really happened through like I'll have a borrower that goes to another city themselves and then introduce me to the burkey operator in another city. So anyway, I it's just it's a it's a strategy that's worked for me and I like I don't I don't aspire to to you know, I at my age and stage I'm not gonna be at fifty states, but I could be in five or ten markets, you know.

And feel confident that, you know, my whole goal was to set it up to run without me. and that's what I'm working towards right now, is to get that enterprise value. You know, you're talking about the long game, like I'd love to sell it at some point, you know, when it's worth something to somebody else, you know. So

Jack BeVier (25:47)
Mm-hmm.

Do you so the DSCR market has been I would say, you know, I'll I'll s I'll say that New York is the like the underwriting guidelines for DSCR loans have been getting a little bit more conservative. There's been some bumps in s in different cities, Baltimore, Philadelphia. there's been some fraud in Kansas City. Like it's not just you know, it's been a little bit not I wouldn't call it widespread, but that's more than just like

one story.

You know, there's been some

dan butler (26:13)
Mm.

Jack BeVier (26:13)
shoots of concern. and it's been a really soft past ninety-ish days, at least round round me. are you s getting concerned about what appraised that appraised values might start to threaten that business model for the turnkey operators? Because if they can't get that DSCR exit, that's the I mean, that is the exit strategy for the scenario you're talking about, right?

dan butler (26:38)
Yeah, I think the mitigation piece of that is trying to make sure they have some cash reserves. You know, when I first started out in this business, I mean I shamefully would tell you that I didn't even look at cash reserves until I had my first I got stuck because my appraisal was ten percent short. They want me to bring five thousand. I'm like, you can't bring five thousand, you still got twenty thousand in equity.

I was just I was just blown away. You know what I mean? I like, why'd you even come I mean but then I had to put things in place to to make sure there's reserves of twenty plus thousand, you know, for people to come and get a loan so that I know that they can handle some some you know, shifts in that that number. I mean

David Moses (27:15)
Yeah, 'cause there's some unknowns

there. You know, you're you're y those numbers are you know, th they're it's all predicated on the the appraised value you know, anticipated appraised value six months from now. But you're

dan butler (27:33)
Mm-hmm.

David Moses (27:34)
are are you are you considering is anything going on in your market that leads you to believe there's gonna be a

any sort of pullback or slowdown, any any n you know correction or anything like that that you kinda feel, you know, feel. I'm not like I say like see it.

dan butler (27:52)
Yeah.

David Moses (27:53)
Obviously if you saw it, you'd already be

dan butler (27:55)
I no, I hear what you're saying. I think I do worry about that. That's you know, something that would keep me up at night. But I think the markets that we picked have been working class markets. You know, like in the subset market of that market is more working class. So like you're a little bit insulated from huge swings that you hear in the headlines of new you know what I mean, like and I'm trying to think a Phoenix or a Las Vegas or an Atlant, you know what I mean? Like

David Moses (28:19)
Detroit or Baltimore.

dan butler (28:22)
Or Baltimore, you know, like I I'm more I mean, Detroit's one of those like you know that there's probably certain markets in Detroit that I feel like it gonna move thirty percent down, right? You know what I mean? Like

David Moses (28:34)
correct. Yeah, that's what we don't we

don't I don't do anything in the city because it is it it's not the you know, it's feast or famine. There's there's a lot of I'm gonna say I do nothing in the city. I do relatively little in the city for that reason. but yeah, there's a lot of just blue collar cities you know, that generally appraisals wind up fairly consistent. You you have yeah, and you've got a purchase price that's kind of driving

that value for the appraiser and making it little easier for them to to be comfortable with a number.

dan butler (29:07)
Well, to your point, I'm also okay with owning it at say say it went from seventy five percent to eighty five percent. I'm still okay owning it because the rent's not gonna go down that same ratio. I'll still cash flow it because I'm sticking in that number that's you know, I got burned really bad in twenty twenty three when I had three hundred fifty thousand dollar houses on a flip. And I literally still own some of those that are rented for twenty five hundred bucks. Well, y'all I mean

Just by d

Jack BeVier (29:37)
So

dan butler (29:37)
Jack's face, you're like, well, that doesn't cash flow. I'm like, yeah, that's that's exactly right. But I I couldn't sell it, so I gotta rent it, you know, at a negative until the market catches back up. But you know, time heals wounds. And that that would be, you know, I would say on the lending business, and Jack, you could probably sp I'd love to hear your thoughts on this, but like all my money is going back in the lending business. Like I'm not living off the lending, I'm putting all the cash back in to keep my note interest owed.

Is you were talking about on the liability balance sheet. I'm to squeeze that down so that if I ever got squeezed on the revenue coming in, I got some margin. You see does that make sense? So

Jack BeVier (30:15)
Yeah. Yeah, yeah, absolutely.

Yeah. The given where the cost of debt is today, it's not so obvious that I wanna borrow corporate debt, you know, like if we're not

dan butler (30:24)
Right.

Jack BeVier (30:24)
lending and payoffs are coming in and we just pay down our line of credit or pay off some investors, it's not it's not, you know, it ain't four percent anymore. So it's a real consideration.

dan butler (30:32)
Well, I I had

my partner in the property management business. We also have a lending business there. And we were talking a few months ago, and it just he had me a light bulb moment for me of I've been pushing hard. I had a lot of money, like say property tax escrow. I had money sitting there in zero percent checking accounts, and I moved it. I just had an epiphany that I need to put in a four percent money market. And he argued

Which I thought was a great argument. It's like he puts his cash almost to zero because he puts it all back in those lines of credit, charging seven percent. And in my mind, it's just a psychological shift. I'm like, well, I don't like having no cash. But he's like, No, you got cash, you're just you're just reducing your your debt load and you can pull it

Jack BeVier (31:16)
Yeah.

dan butler (31:17)
back out. Does that make sense? Like, it's so very hard to like see your bank count at $100 and saving, you know, on ten thousand dollars you put in your line of credit just to save.

Anyway, does that make sense what I'm saying?

Jack BeVier (31:28)
It it does. I

David Moses (31:28)
It it does.

Jack BeVier (31:29)
w that is a debate that we have definitely had and like I don't know, s continue to revisit. Cause the the problem is that if like really hits the fan, the banks will just freeze your balance at zero and you won't have access to cash because and and it happened to us. Like that's what exactly what happened in two thousand it was it was the late two thousand seven, early two thousand eight.

We had a big operating line of credit, super over collateralized, never missed a payment, everything was wonderful. And they just got scared and said, Hey, we're freezing balances and like you just don't have access to it. and so we had all these assets, you know, secure in this line of credit and no liquidity to speak of, you know, b because of that. So I agree. It's like the best, it's the it's the it's the

dan butler (32:14)
That's a great Yeah. Both

Jack BeVier (32:16)
it's the best return.

on the

dan butler (32:18)
Yep.

Jack BeVier (32:18)
dollar is paying down the line of credit, but I think that I do we do that above a above a threshold of luc of

dan butler (32:25)
Yeah.

Jack BeVier (32:25)
liquidity that we then put into something more liquid. Yeah.

dan butler (32:28)
I was gonna say both end. It's

David Moses (32:30)
Yeah, that's

dan butler (32:31)
a both and, right?

David Moses (32:32)
and and it doesn't it's not just bank gets scared, right, and and just freezes your line because of your business. It can be that you know, the bank has some liquidity event, some issue gets bought. you know I've had i it seems like when bank when small banks get bought, great things and terrible things happen depending on

How you're involved with that bank and w what what what exactly you're doing with them. But it seems like when you're a a borrower and you've built a relationship and the bank gets bought, at least I've had this happen twice to me. you know, the somebody comes in and they're like, Well, this is ridiculous. How did it get, you know, what what how how how did this how did this wind up this way? Like this is this is yeah, this this is this can't be

Jack BeVier (33:16)
How this credit could approved. Yeah.

dan butler (33:18)
right.

David Moses (33:20)
this can't be real. This can't be

You know, and and and then you kinda have to get pissed and move on or or start over. And then the on the other side of things, you know, I've had I've had situations where I've had deals to buy things from banks and then they get bought and they're like, Well, this was somebody else's this was somebody else's mess. So you know, I I can play with them a little bit and get an even better deal and and they're they're they're happy. They're happy to do that because, you know, they don't have anyone

The answer to wasn't there wasn't their up.

Jack BeVier (33:53)
Hey, Dan, Dibble's advocate for you. If you're the guy,

dan butler (33:56)
Mm-hmm.

Jack BeVier (33:56)
if you're the money, right? If you're you're you're financing these rental properties and you're the money and the borrowers is the borrower coming to the table with any money or you rolling it all in as

dan butler (34:05)
Yes.

Jack BeVier (34:06)
long as it's seventy five percent?

David Moses (34:08)
Yeah, he he said the points and the closing costs, right?

dan butler (34:10)
Points and close costs are coming to the table. Unless unless two things long term, well, three things. Their liquidity, their the loan to value might be so good, like sixty percent.

David Moses (34:21)
Yeah, a pr a prison.

dan butler (34:23)
or they're a long term borrower that there's some trust I might roll in half the points or you know what I mean, like something to help. If they're gonna do three deals, this just helps. And and I I'm all I'm all you know, you know, we were talking about my portfolio.

I did all that with no money down. So sometimes I feel like a hypocrite. It's funny just putting the hats on. Like as an investor, I'm trying to get no money down. As a as the lender, I want to put as much money down. Like I just I st I I have a conflicting feeling about that. So I tried my best to like help in that situation though without putting myself in danger. So

Jack BeVier (34:59)
The way that the way that we run our r our real estate business, I'm like no no no, there's less like hey so I like s you I'll I'll go to our our processes and our understanders and I'll be like, All right, so here's my hustle. Here's here's what here's what I here's what I would do. Like, so keep an eye out for that. And it doesn't mean that it's necessarily a bad act, but it is a risk transfer, right? Like and as an entrepreneur, my job I'm trying to hustle and like keep as much risk on somebody else's, you know, ev some everybody else's balance sheet and minimize the risk on my balance sheet. So like

It's not it's not unethical. I'm not crossing any lines, but there is a risk transfer that good entrepreneurs are always looking for. We call it a you know, people call it angle, right? Like like trying to trying to get a little bit of edge in the situation because the cumulative effect of that over time can really save your butt and or make you a bunch of money. And if the counterparty, you know, but if with your lender hat on, your people in the office behave like a bank, they'll get treat then then your company will get treated like a bank, you know. But if they've

dan butler (35:58)
Right.

Jack BeVier (35:59)
But if you teach the hustle, then they'll be like, Hey, so and so's doing this thing, they're trying to, you know, do this thing. Do we wanna let them get away with it or not? they're great, everything's fine, the guy's worth a gazillion dollars, like, yeah, it's fine, roll the closing costs in, you know.

dan butler (36:12)
Yeah, yeah. Well and and

David Moses (36:13)
Yeah, I I I admit I

I I I do a poor job at at that. I look at I I'm really I'm so focused on, you know, kind of the kill, or just getting the best deal. I don't I don't I I don't think about risk transfer as much. I don't think about I as much as I should. what kind of angle I can I can play on that side.

Jack BeVier (36:34)
Yeah, mean even in the even in the even in the kill, right? Like the kill is full of you trying to get the best set of terms, right? It's not just the number, right? It's the b it's the terms around that number that you know, often more important than the number, right? So

dan butler (36:51)
When I I had one the other day that guy was buying five houses we were financing and I found out he was trying to put a second with from the seller at closing. And I was like, Man, I feel so hypocritical by telling him 'cause I just bought a commercial building with a second, you know what I mean? In much higher numbers because it's a you know commercial building. And I'm like, man, what do I do here? Wait a sec, you like you know, it's like I was short circuiting and was like, Yeah, that's right.

Jack BeVier (37:12)
Mm-hmm. Wait a second. Yeah. Yeah. I wanna see skin in the game here, where that you just yeah, got off the phone

using no skin in the game. Yeah. Yeah.

dan butler (37:22)
Right. But it

David Moses (37:23)
Yeah.

dan butler (37:23)
kept his liquidity high by doing that. So I could make an argument of like I'd rather him have seventy five thousand in the bank to cover my debt payments for the sex six months and then take me out. The only risk is what if what if the ARV's not there? You know. So anyway.

Jack BeVier (37:38)
Yeah. I think that yeah, the

way we think about that is like if if the guy if the guy doesn't need it, I'm fine with him doing it. Right. Like if he doesn't need the seller to take a second and he could come to the table with the cash, no problem. Do it, respect the hustle. But if he

dan butler (37:50)
Yeah. Yeah.

Jack BeVier (37:53)
can't do this deal unless that thing happens,

dan butler (37:55)
Yeah.

Jack BeVier (37:56)
I have no interest in that. I'm just the equity and I'm just being pay I'm just the equity being paid like the debt,

dan butler (38:01)
Phew.

Jack BeVier (38:02)
you know, and I'm actually being underpaid for the risk for the actual risk I'm taking.

dan butler (38:04)
Thank you for articulating what my head couldn't

couldn't.

David Moses (38:07)
That that that's a yeah, that's a that's that's kinda the right way to look at it.

dan butler (38:11)
Yeah, I was looking at it that way, but I couldn't articulate what you just said, so I'm gonna I'm gonna steal that from you shamelessly.

Jack BeVier (38:16)
Yeah, cool.

Well, so to that point, let me like double devil's advocate, or I'm just curious to hear your thoughts on this philosophically. If you're given a hundred percent financing to buy turnkey rentals, why don't you just keep why don't you just keep the rentals yourself? Why don't you just buy the turnkey rentals and DSCR Your credit's great. You get all of your money back through a through a refi. Like, why not just keep the ups? Are you know, are you just financing for somebody else to get the ups no money down?

Why not keep the ups yourself?

David Moses (38:47)
And the tax benefits and the, you know, other ancillary

dan butler (38:51)
when I five years ago, again it's it's age and stage, man. I think that's where I've you know, I had one of my my mentors that's 75 years old now that said he would never not own a rental house, never stop lending, never there was a third one. And he didn't do any of them. He just does a stock market. So I've just realized we got we've got to evolve, and I've like when I sold those hundred and seventy houses.

and figured out I bought, you know, one building with you know that was worth you know fifty houses in one building and I got the depreciation offset cash that I made from selling the houses. I was like, I just need to be in a volume business. I the one off houses just doesn't, you know. And the hedge funds have screwed us up. Us three of us here, we can't go find the twenty house, the fifty house packages anymore because they all got sucked up through the private equ I mean,

I I 'cause I used to get the report, I still do it, but I don't look at us like I used to. But like the Shelby County, which is Memphis proper, and you know, all of us listed of how many houses we you know, parcels we own and you know, there used to be a ton of us, meaning private owners. I mean, there's only a couple of us left in there that are in the top twenty, thirty, you

Jack BeVier (40:00)
Hmm.

dan butler (40:00)
know, it's hedge funds, the government,

Jack BeVier (40:02)
Okay.

dan butler (40:03)
you know, i and then, you know, stragglers. So like the opportunity, my p point on that is like it's just not worth

At this age and stage to do one house to answer

Jack BeVier (40:13)
Yeah, sure. I'll follow.

dan butler (40:14)
your question, I'd rather buy one building, you know, that's worth ten or fifteen houses at one time.

Jack BeVier (40:20)
So there's one more topic. We got a couple minutes here left. There's one more topic I really wanted to cover with you though. So given your you invest Dan invests in in a lot of businesses, like operating businesses, supposed, you know, and you you come in with you'll come in with capital, you'll come in with mentorship, and you bring a tremendous amount of experience in your own entrepreneurial exercises to each of those businesses that you are, you know, that you're investing in. What are you seeing from a

small business owner perspective, I don't have a great read on like how the I have a great read on how it's been for a real estate small business. But for a non-real estate small business, how have the last 12 months been and what what's the mood right now on a going forward

basis?

dan butler (41:04)
I think you in in the retail space, I think it's just tough. I mean, it's tough to find labor, margins are are low. you know, sp specifically like we're talking about the food industry. I mean, people, you know, especially in this inflationary with gases and and stuff where it's at, like, they're just not going out to eat like they were, you know, a couple of years ago. and that I think that's a lot a lot of that's changed through COVID and stuff like that. So like

You're seeing a lot of shift towards pickup, DoorDash, you know, so you're not getting all the the the dollars you would if they were to show up in your, you know, they're getting specifically what they want and get at home. you know, the the health clinics like we talked about earlier, like you know, the the the big the big pharmace now you weight loss drugs and stuff like that is so easily accessible online versus a clinic that kind of destroys that model. So, but I've seen good.

The good the good ones are s are any service business, you know, because the premium is there to be charged for service, because the labor is le I mean but it's a harder one to to to manage in the sense of labor and and all that stuff. Correct. Yes. Yep. Yep. No. Yes.

Jack BeVier (42:12)
You're saying the customer is still still willing to pay a premium for a quality service. So you're not seeing that dry up yet. Like the c the customer's still spending. The consumer's still

David Moses (42:21)
What kind of

services?

Jack BeVier (42:22)
spending.

David Moses (42:23)
What kind of services are like what kind of business What's that? Mm-hmm.

dan butler (42:24)
home home remodel. Home remodel is a big

one. you think about you know, like we couldn't we wanted to s we're selling our personal house in Memphis and downsizing and the the comment I kept getting I can't leave my two point three two point seven five percent mortgage. They'd rather add on, you know, and so that creates opportunity for the rehab space.

The restoration business, that's another one. Like there's always gonna be floods, fire, catastrophic events that you gotta have something right now to take care of that. So I mean, you know, I I I think it's just a mixed bag. I mean, I just think the but the retail side, I think it's it's been a tough, you know, a tough go.

David Moses (43:09)
What what's the scenario in a

restoration or or or a remodel business that you're like all right, that that that like really piques your interest, really gets like you know, it gets you following up really aggressively.

dan butler (43:25)
What do you mean following up? What do you mean by that?

David Moses (43:26)
Like like

In the house, you in the house business we look at what's the distress, right? Like what's what what what's the reason why this transaction needs to get done? Right. And then and then as a buyer I can I can assess my you know, my level of interest in it from that. When you're looking

dan butler (43:40)
Mm-hmm.

David Moses (43:41)
at a business, you know, is it is it someone starting a business who like is leaving a well known company? Is it something where someone's buying a business that's a a

with a good reputation, someone who's expanding, like what what sorts of scenarios when someone comes to you are you saying, Okay, this is this is something, this this is the story I want to hear?

dan butler (44:03)
So, you know, I would start with the if you've heard of Dan Sullivan, strategic coach. I mean, he preaches and has multiple podcasts and books about who, not how. And so I focus on the who, you know, culture index, which I think we'll we'll spend a lot of time on that on our our mastermind this week, thankfully. It's always good to revisit that. And then so who, not how, the the culture index really tells me a lot of like

That operator, like what they're gonna be able to do. Like, I don't think I'd want a debater. I'm not gonna invest in a debater to run a service business. You know what I mean? Like that profile. I'm gonna I'm sure the audience is like, what's a debater? It's like just a

David Moses (44:44)
Yeah.

dan butler (44:44)
more of a sales oriented person, not organized, can't handle processes. You you need somebody process driven. but man, I would say probably parlay above that before even like is core values.

Like I spent a ton of time and I didn't do that when I first, you know, it was important to me. It's always been important to me. My previous partner that y'all know, that I sold to, like, we spent six months on core values. And and the reason that's so important is like when the going gets tough, how are they gonna react? It's all good when

Jack BeVier (45:17)
How do you get it on?

dan butler (45:18)
everything's peachy and ro you know what I mean? Like, but when things are adverse, are they gonna steal money? Are they gonna move money? Are gonna not tell you something? Are they gonna go behind your back? Like what's the

Things that might happen.

Jack BeVier (45:30)
How do you get an honest read of that though? Like do you

David Moses (45:33)
Yeah, people

dan butler (45:33)
Time.

David Moses (45:34)
say they you know, you get core values from Chat GPT, you don't necessarily

dan butler (45:35)
Time.

Time. What what so that would be my fourth would be like I the two that I rushed into are the worst deals I did. And it was always it was it was around like we gotta get clothes, we gotta get this going, we gotta you know it was it's like whoa whoa, my gut and then fifth would be gut. And I would probably put I don't know where I put that in the what those the order, but like the two times I went against my gut I lost.

And gut is a real thing. So but time, Jack, where that comes in is like you start asking other people, you get time to like really sit down and have coffee with somebody that with interacted with that. Does that make sense? Like like like

Jack BeVier (46:16)
It does. Just h how are

you like I would think that somebody who wants to be your partner is gonna be on best behavior, you know, like like how do you do you try do you tr try to pressure test the situation to create situations that they're under duress to get themselves to reveal themselves? Cause, you know, if it you know, if if if Dan's if Dan and I are talking about partnership, I'm gonna be on best behavior.

David Moses (46:40)
This this is this is where having

dan butler (46:40)
Yes.

David Moses (46:41)
a guy like Jack around is really helpful because you know, what I say is gut and you might say is gut, like Jack puts into words and it's

dan butler (46:49)
Mm-hmm.

David Moses (46:50)
it's really he articulates it, which is which is really nice. I could be

dan butler (46:54)
Well, I mean

David Moses (46:54)
like, yeah, that's what I that's what I meant.

Jack BeVier (46:56)
No, I'm

just well I'm just curious what the what your process is around that, you know, like you gotta we gotta put a process

dan butler (46:57)
Well well but well Jack, like so so

Jack BeVier (47:01)
to it. So

dan butler (47:01)
like my first fil like I call it filters, you know. what's that guy's name? that w wrote the one thing, Papasan. He's huge

Jack BeVier (47:10)
Mm. Mm-hmm.

dan butler (47:11)
on filters, so I really learned that from him. Like when I first meet with somebody that's an intro, like and I've gotten most of my intros, by the way, like you're like from local banks. And so that's probably

Probably the number one core value piece of like integrity, like, man, don't be introducing me to that guy that that thinks he's profitable because he's got cash in the bank. I want somebody that's semi-buttoned up but needs some help. Right? So I'm trusting my banker. Like and again, say I had 14 bankers, I know out of the fourteen, I'm not taking referrals from all fourteen. I know the few that I would say, he knows. Does that make sense?

Jack BeVier (47:53)
Mm-hmm.

Yeah.

dan butler (47:54)
So that's that's one. Two w

David Moses (47:56)
Is is that like the super

conservative guys who are like, you know, like this is a deal that I know another bank would do, but he's he's too conservative and and I'm gonna if he's referring me somebody, I'm probably I'm probably very interested.

dan butler (48:11)
Yeah, it's probably the banker that is what do you end up finding is that that's good at getting deals brought to him, but his bank's too conservative to make it work. And so he's handing

Jack BeVier (48:22)
Gotcha.

dan butler (48:22)
it off to you as a lead. You know, so that that'd be number one. And number two, when I sit the first time I sit down with him, man, what are your personal core values?

Jack BeVier (48:31)
you just ask Mm-hmm.

dan butler (48:32)
Just ask. And if they

David Moses (48:33)
Put on the spot.

dan butler (48:34)
I

mean, and if they can't answer that question, then they haven't thought deep enough and don't have it thought through. To me, that's a filter of be like, and I I'm just that's not if you can't tell me like yeah,

Jack BeVier (48:46)
Not my people. Yeah.

dan butler (48:47)
it's not my people. Like you're not putting that thought into any good. I this is not just this what's that?

David Moses (48:51)
Yeah, but to Jack's point, if they're that prepared with that

answer, like somebody's that prepared with their core values, you don't necessarily know where they came from.

dan butler (49:01)
Can you name two of your three of your core values right now? Okay. All right. Thank you. Thank you. You prove my point. Now I'm just I get what you're saying, like, but if they're not

David Moses (49:03)
Yeah, I can name all my core values. I have on the on the wall. We talk about constantly.

dan butler (49:14)
quick on their like that that's it puts them in an adverse situation where they can't say

Jack BeVier (49:18)
Yeah. Yeah. Let me think on that and come up with something for the meeting tomorrow.

dan butler (49:21)
Let me think on that and get back to you. It's like,

nah, man, I really love I I gotta treat people well. I gotta look at the long term view. Or if they you know, if they can't say long term, like they're not thinking long term, that cause that is one. If they think about man, I just gotta make the money. I gotta figure out how to make the money. That's my most important thing. No, I'm not. Money is a byproduct of doing good things. And and that's my core value. Money is a byproduct, it's not the thing.

And so if that's your thing, which I had one of those partners, and when a rubber hits the road, that was more important to him than the long term. And so I I just can't that wasn't gonna be the good fit.

David Moses (50:01)
What what's y your favorite core value of your core values?

dan butler (50:09)
you know it

David Moses (50:09)
Wh which would be the if you

if you had to get rid of them, which would be the last to go?

dan butler (50:13)
The last to go.

Jack BeVier (50:15)
They probably have seasons too. Mine mine have seasons.

dan butler (50:17)
Mm.

Jack BeVier (50:17)
There's things that like really like resonate with me at any particular point in time.

dan butler (50:22)
I I

David Moses (50:23)
Yeah, that's true.

dan butler (50:24)
got I got two. Can I give you two?

David Moses (50:26)
Yeah, you can give me two.

dan butler (50:28)
And I don't use the jacks. This depends on the season. 100%

David Moses (50:30)
Yeah.

dan butler (50:31)
accountability. And then long-term partnership versus short-term transaction. The long view.

David Moses (50:38)
Yeah, we have

dan butler (50:39)
And then personal accountability is like, I don't care whose responsibility it is, what can you do to help the situation or the company versus you know that that's a book, it's a great book, QBQ, question behind the question, the cross arms of blame. This is what most people

They're doing this number, right? But if you can say, what can I do to help you get through that problem? And so I was telling my wife we had this exact same thing. She was like, Why are you putting this on me to fix fix something that's your team should be doing? I'm like, because I'm trying to get her excuses out of why she's saying she can't do her job so I can see if she can really do her job.

Jack BeVier (51:16)
Mm-hmm.

dan butler (51:17)
Does that sense? Like I'm sit I

David Moses (51:18)
Yeah.

dan butler (51:19)
I I've pulled all those excuses. So personal accountability is probably my

David Moses (51:22)
Ours is

dan butler (51:23)
probably my most passionate personal accountability, but I I long term partnerships right there because every decision is always about that relationship and taking the high road and doing what's best for the person you're involved with versus your own personal gain. So

David Moses (51:37)
What

what about you, Jack?

Jack BeVier (51:38)
I knew you're gonna ask me. And I was like, please don't ask me

dan butler (51:40)
He was like smirking, he's like

Jack BeVier (51:42)
because because Dan's are the same as mine. And I was just like, it's gonna sound cliche if I'm like, yeah, what Dan said. but but I Yeah. I don't think

dan butler (51:47)
Say it a different way. Say it a much more articulate way that you have in the other

David Moses (51:50)
Well I'll I'll give mine too.

Jack BeVier (51:51)
I can. I don't think I can. I think I'm I'm a big, big accountability guy, like not living with not living with failure, not not not being a passive participant in failure, right? Like if something's

something's F you have an obligation to raise your hand and make it better and and you know and be a participant in this you know in this venture and and I think that account that's that's a little it's a version of accountability I I guess I would say.

David Moses (52:20)
It is. It's different.

dan butler (52:21)
That

I would say that's that's growth.

Jack BeVier (52:24)
That's growth, that's an interesting way of pr putting that. I wouldn't have put that word to it.

dan butler (52:27)
Like

failing forward. Like

Jack BeVier (52:30)
Yeah.

dan butler (52:31)
you know what I mean? Like, it's okay you failed, but did you grow from it and we're moving forward? And I that that would be my third that my third would be growth because what are you doing spiritually, physically, mentally, relationally? Every day should

Jack BeVier (52:45)
Yeah.

dan butler (52:45)
be moving forward in some way by putting deposits in. And to your point, Jack, what do you where are you taking with that? If you're just like setting and making excuses and

Jack BeVier (52:56)
Yeah, I don't like I don't like buck passers. You know, like I've like three sixty accountability. The people who work for you, yourself,

dan butler (53:02)
Yeah.

Jack BeVier (53:03)
the people who you work for, it's it's gotta be three hundred and sixty degree accountability. If your boss is screwing up, you need to tell him that he's screwing up. If we've if like we're down

dan butler (53:11)
Right.

Jack BeVier (53:12)
the wrong path, you need to tell me that you you know, voice your opinion and tell me you think you're on the wrong path. so like,

dan butler (53:16)
Yeah.

Jack BeVier (53:16)
you know, I'm I'm a three sixty accountability kind of person. And then the other is is is actually is long term investment. So like

I'm I'm very much ascribed subscribed to the perspective of focus on adding value to society and then money comes. Like it there's almost

dan butler (53:33)
Yeah.

Jack BeVier (53:33)
nothing you can do adding value

David Moses (53:34)
Money follow.

Jack BeVier (53:35)
to society that doesn't result in some money. But like if you focus on the you know the the the the trade or the hustle or the the the paper shuffle that results in money popping out, that's a guaranteed to be a business that disappears within a five year period.

Right, like that will not make it three cycles. But if you just get good at something and then really hone your craft and in and and so hey, find something that you like doing because you're gonna be doing it for a long time, you know, then money just tends to follow. So

dan butler (54:07)
That's right.

Jack BeVier (54:08)
there was a book that was a book, right? Do What You Love, the money will follow. It's probab I haven't read it. I actually have not read that book. But

David Moses (54:12)
Yeah.

dan butler (54:12)
Really? I'm gonna

I'm gonna message myself that one 'cause I like that. What about yours, David? What were yours?

David Moses (54:18)
Yeah, I I I think there are

sorry, go ahead.

dan butler (54:22)
What was your

Jack BeVier (54:22)
Yes.

dan butler (54:23)
core values?

David Moses (54:24)
mine.

so I have one around accountability. you know, it's it's not my very favorite, but it is, you know, it's probably number two. We we we call it accountable first. which which is essentially like, you know, before you hold anyone else accountable, before you, you know, you like first you have to own your part in it. Right. So e no matter how small it is, if it's ninety nine percent the other guy's fault, you you gotta you gotta name the one percent before you get to

Call out the other the other ninety nine. so that's ours around accountability. And we have one, my favorite one is just do the right thing because it isn't about like it's not about don't steal, you know. It it's about the fact that there are just so many times during the day, the week, the month, the quarter, whatever, where you have to make a decision. And that decision is either, you know, it it's either in the moment or

It it's with a long term vision. It's either, you know, gonna sacrifice one relationship, you know, to the benefit of of of another. You know, there are all these little decisions that we make where it's just, hey, you know, do the right thing. And I I you know, kinda what I put around it is it when you when you look back on it a year from now, five years from now, whatever, are you gonna be proud of the decision you made? Not not are you gonna same make the same

decision again, because that's a completely different thing. Cause, you know, the benefit of of hindsight is you know, is is fairly powerful. But but g if y if you knew exactly what you knew then, right, and and and you were to make that same decision, like w would you would you make the same decision? And and so that that I think that one's my favorite just 'cause it it's it's just so hard to really get right all the time. So there's a lot of

A lot of working on it.

Jack BeVier (56:16)
Yeah, I hear that.

dan butler (56:16)
I got

I got one that's that that just hit me when you're y'all both of y'all were talking. My kid, my son, left our house in shambles when he had friends from college over. And last Thanksgiving I had a family meeting. I do a family meeting every Thanksgiving, just get where we're giving and what we're doing, all that stuff. And I was like, I was gonna make a list of rules. We're gonna trash to to clean you know da da da. I'm like, you know what? We don't need rules. You leave it better than you found it. That's the

Jack BeVier (56:43)
Mm-hmm.

dan butler (56:44)
rule.

Jack BeVier (56:45)
Mm-hmm.

dan butler (56:45)
And

to to Jack's point, like and all of us what we're saying is like that could be your business, that could be your relationship. Does that make sense? Like I I I just hit me of like, it could be the world.

David Moses (56:52)
Could be the world.

dan butler (56:54)
Like to your point, adding value to the world. Leave it better than you found it today, this hour, tomorrow, and things will progress forward and good things will happen by doing that. So anyway, that was that was a light bulb moment to me with the family of just leave it better than you found it. That's all you have to say.

Jack BeVier (57:10)
Yeah. I like those, I like those North Stars. I was having this conversation

dan butler (57:14)
Mm-hmm.

Jack BeVier (57:15)
with somebody the other day. So that like I'm very much like a just set you know, set the North Star and then I don't have to detail every little edge case if-then statement as to how you would handle that situation. Just like act in congruence with the North Stars and everything will be fine, you know, and you know, turn your brain on and you know, aim you know, keep the North Star in mind when you make a business decision.

And you'll be fine. You know, no one's gonna get yelled you know, no one's gonna yell at you. You'll and you'll make the right decision ninety nine percent of the time. Rather than like, like you said, like trying to prescribe every little thing that might happen and document every little thing that might happen, like, it's just it's an it would be an exhausting way to run a business. Just

dan butler (57:54)
Yeah. But that North Star gives you that autonomy, right? It gives you the boundaries. It gives

Jack BeVier (57:58)
Yeah. Yeah.

dan butler (58:00)
you that just just run with it, you know? So anyway. Yeah man.

Jack BeVier (58:04)
Dan, I I know we

we held you a little bit longer than we promised you and I really appreciate

dan butler (58:08)
good.

Jack BeVier (58:08)
your flexibility. It was it's great to see you. All as always, super enjoyed the conversation. Love love getting your perspective on stuff. And hey, I'm looking I'm the most looking forward to having dinner with you guys on on Wednesday in Charlotte at next Mastermind. So

David Moses (58:22)
on Wednesday in Charlie. Do

we have a do we have a place in mind? It's

dan butler (58:24)
Coming two days. Yeah.

David Moses (58:26)
already already selected.

Jack BeVier (58:26)
Yeah.

Yeah, agendas needs I need to go work on the agenda right now as a matter of fact. So that's where I'm gonna hop off to.

dan butler (58:32)
Alright.

We'll see you guys Wednesday. Alright. That's right.

Jack BeVier (58:34)
Yep, sounds good. Thanks everybody. This has been another episode

David Moses (58:35)
Fa Fable's gotta work on the agenda.

Jack BeVier (58:38)
of Real Investor Radio with David Moses and Jack Revere, joined by Dan Butler Day. Hope everyone has a great week and talk to you soon.

dan butler (58:47)
Thank you, S.

David Moses (58:48)
Thanks,

gentlemen.